I don't have a horse in this race, but IMO the point is more about AWS-provided infrastructure that lets people scale more easily than otherwise possible; things like Elastic Map Reduce, S3, DynamoDB, SQS + SNS, RDS, etc are less-easily replaced by home-grown equivalents. There are great open-source solutions for every one of those things, but the point is having to not manage them.
If you're using the cloud as "just another data center", I feel like you're missing many of the benefits of software-defined infrastructure and disposable systems.
Tying yourself to a specific provider is dangerous.
RDS and EMR are fine, since you can reproduce the exact same API anywhere else. S3 is also fine, since its API is simple enough and even reproduced by other vendors. Something like DynamoDB I wouldn't touch.
Things like AWS are great for when you don't yet know what you need, for absorbing load peaks and for getting something running very quickly. They are however the most expensive thing you can buy for what you get.
exactly. Speed of innovation is how you win. If you start with an MVP, a cheap 5$ droplet at digital ocean is cheaper than the cheapest hetzner server. if you grow and need failover-solutions, you'll run into a lot of devops work when you build everything your own. (you can't automate a lot of work because of lack of API and automation by the typical providers)
So it's not a price question imho. It's about speed of innovation, usability of "building blocks" and limiting of operational risks.
If you want to build something sustainable, you earn money or need to be able to scale incredibly well. If you just want to host your private blog, even DigitalOcean provides better packages than Hetzner.
You don't need any of the buzzword-y technologies you list to be supported directly by the host. If you want Docker, you can run it yourself.
VMs are over-rated.